Market Analysis: Review on Wednesday, Dec 1

Mumbai, Dec 2: BSE Benchmark indices gained 1.7 percent on the back of sharp rise in export orders for the month of Nov, 2010 and firm European markets. BSE Sensex gained 328 points and closed at 19,850, while Nifty gained 98 points and closed at 5,961 on Wednesday, Dec 1.

Premji transfers 8.6 percent Wipro stake to not-for-profit trust

Azim Premji, transferring about 8.6 percent stake worth over Rs 8,000 crore to a private trust controlled by him. The trust will then use the money to finanace the educational initiatives being carried out under the ambit of the Azim Premji Foundation.

The Shares, at current market prices, are worth Rs 8,846 crore, and represent the single – largest donation by an individual towards philanthropic activities. Premji"s stake in the Company is expected to come down to just over 70 percent from the current level of 79 percent. This will help Premji bring down his holding in the company and comply with the new finanace ministry rule that mandates companies listed in India must increase their public shareholding to 25 percent.

Only Bharti, Punj Lloyd submit bids for TCIL stake in Hexacom

Bharti Airtel and Punj Lloyd are the only two companies to have submitted bids to buy out Telecom Consultants of India"s (TCIL) 30 percent stake in Bharti Hexacom Airtel"s operations in six Northeastern states and Rajasthan are through Bharti Hexacom.

Airtel owns 70 percent stake in Hexacom, and the government had recently invited bids as TCIL wanted to exit by selling stake in the JV. The deal will be worth upwards of Rs 1,800 crore, which is the base price prescribed by the government-appointed consultant.

As per Department of Telecom records, Hexacom had revenues of Rs 1,346 crore and a profit of Rs 331crore in 2007-08 and a net worth of Rs 918 crore. TCIL had earlier tried to exit Hexacom in 2005-06, but decided against it, saying the price offered by Bharti Airtel was too low Bharti Airtel had offered Rs 262.5 crore for TCIl"s stake in Hexacom.

CIL in talks to buy 10 percent stake in Peabody"s Australian asset

State run Coal-India was in advanced talks to buy 10 percent stake in US based Peabody Energy Corp"s assets in Australia. Peabody offered 10 percent in one of their coal producing mines in Australia. The Company had last month put the deal cost at less than $200 million. The Navaratna Company, which has been scouting for coal mines abroad, has earmarked Rs 6,000 crore for this purpose in the current financial year.

IOC aims to raise Rs 20,000 crore in follow-on issue

Indian Oil Corporation (IOC) expects to sell its shares at around Rs 450 each in its follow-on public offer (FPO) expected early 2011. The government would divest 10 percent of IOC equity, along with the Company selling an equal number of freshly issued shares, and was likely in the third or fourth week of Jan.

The Company has hired six banks, including Merril Lynch, Citigroup and ICICI Securities, to handle the public offer. Morgan Stanley, SBI Capital and UBS are the other banks. The share sale proceeds would help IOC revive petro chemical project in the eastern state of Orissa and the western state of Gujarat, as well as a 2.5 million tonne LNG terminal and an associated 1,000 MW power in Ennore, Tamil Nadu.

(An article by DAS CAPITAL MANAGEMENT AND ADVISORS Pvt Ltd)